The Australian federal government has announced a new program to provide cash grants to first-home buyers and owners of new homes.
Owner-occupiers can receive a $25,000, non-taxable grant to help with their home renovation or construction projects. Eligible applicants must have incomes below $125,000 for singles and $200,000 for couples.
The national dwelling cost limit is also set by the HomeBuilder plan at $750,000 This applies to both new and renovated homes. The house must not exceed $1.5 million in value. Construction work must be completed within three months after the expiration of the contract.
HomeBuilder payments can be distributed through existing state and territorial mechanisms. The state and territory governments will process applications for the scheme until the end.
All dwelling types — houses, apartments, off-the-plan units, and house and land package — are eligible under the scheme. Properties that are used for investment purposes will not be allowed under the program.
This scheme can be used in conjunction other homebuyer programs such as First Home Owner Grant or First Home Loan Deposit Scheme.
There are some concerns about the scheme
The HomeBuilder grant announcement was welcomed by the industry. Some experts are concerned about the implementation of this scheme.
Simon Basheer, the national president of Urban Development Institute of Australia, is Simon Basheer. He stated that potential applicants could be restricted by the scheme’s price and income caps, particularly in Sydney and Melbourne.
UDIA believes that a wider range of income limits might be necessary to generate shortfalls in demand. We estimate this at around 50,000 new homes over the near-term. “We urge the government to constantly review this so that we can achieve the vital goal, stimulating demand in a very short time,” she said.
Sarah Megginson, Managing Editor of Australian Broker & Your Investment Property, also voiced similar concerns about the HomeBuilder grant price caps.
A grant worth $150,000 must be spent on home improvements in order to make it one-sixth as valuable. Although this grant is very nice, it’s not enough to convince someone to renovate. Although it’s nice, it’s not enough to convince someone to renovate. It is nice, but it does not make someone go from’should I renovate?’ to ‘what an amazing opportunity!She responded, “What an amazing opportunity! “How many singles could afford a $150,000 renovation of their $700,000.00 house in such an economic climate, with so much uncertainty around the job market and high property prices?
Lynette Mancimeli (Director at Builder Locaters) warned that builders could take advantage of this scheme.
After the HomeBuilder scheme, we will likely see unscrupulous contractors emerge from the woodwork. This is bad news for both the consumer and the many reputable builders who do the right things.
Manciameli said that homeowners have been charged $10.5 billion to repair defects such as leaks or cracks in their gutters over the past ten years.
It is important that consumers verify builders. Checking credit scores and obtaining testimonials are two of the best ways to verify builders. They can avoid being stuck with a dodgy contractor.” she stated.
Peter Koulizos, the chairperson of Property Investment Professionals of Australia, stated that there are already measures in place to protect homeowners.
He stated that “the limited timeframe of this scheme, and the requirement that projects begin within the three month period of the contract date will also help to prevent profiteering from unscrupulous operators.”
Koulizos stressed that homebuyers need to do their homework and make informed decisions before applying for grant money.
Before purchasing a house, it is crucial that homebuyers do thorough research and seek out expert advice. This is a major financial decision that will last more than the $25,000 grant.